Open any financial newspaper or website, these days, and you find articles that foretell an economic downturn before long. Economic forecasts talk about rising corporate debt, a slowdown in corporate earnings, and a rise in the debt-to-earnings ratios at corporations across the board. Current debt-to-earnings ratios are higher than the levels that the country experienced shortly before the financial crisis of 2007. In other parts of the economy, housing prices are higher than ever before, and consumer debt is at levels seen during the financial crisis.
These signs point to the possibility of a recession before long. While small businesses tend to be particularly vulnerable during recessions, however, there are ways in which you can prepare to face them. What follows are tips to help your small business hum along even when the economic climate turns inhospitable.
Nurture your website
We can’t express enough how “recession” proof your website can be if you put the time and energy into nurturing it. Some small businesses believe that once a website is built your contributions to it are over. However, using your site as an actual extension of your small business and nurturing your content strategy, seo and social media marketing you can really extend reach to new clients. Not sure if you site is needing a revamp? Work with local company who focuses on web design in Anchorage.
Pay close attention to your cash flow
While many business expenses are steady drains on your resources, your inflows are usually anything but predictable. It’s important to take care of your cash flow to make sure that you have money coming in, in time for when you owe suppliers or other creditors. Reviewing receivables and sending out invoices is a good way to ensure that you keep inflows steady. If there are clients who are overdue on their payments, it’s important to send out reminders to make sure that you collect.
Take a close look at your inventory management
If you’ve had the same inventory management process in place for years, it’s possible that it is no longer effective. Even as you look through your receivables, you should devote some time to going over your inventory practices. If your company stocks up needlessly on expensive components, it could upset your cash flow calculations. It’s important to try to take your business through each month with only as much inventory as you need.
Get better at your core competencies
Diversifying your product range is always a good way to get ahead in business. It’s important, however, that your attempts at diversification are more than a formality. You should make your efforts count. If you can’t be the best in the areas that you diversify into, it’s a better idea to stay close to your core competency and excel at it.
Make the most of your current customer base
If you have loyal customers, it’s important to capitalize on them. You can offer them discounts or early access to new products. Show your loyal customers how much you appreciate them so that they keep coming back.
Be a strong competitor
Once you make sure that your existing customer base is yours to keep, recession-proofing your business can be about looking for ways to expand your base. Whether you’re a niche player or a more mainstream one, you need to be able to win customers away from your competition.
It’s important to study what the competition does on social media, with store design, and with digital marketing and beat them at their own game.
Never let up on your marketing
It’s important to keep marketing your business, even through an economic downturn. If people don’t know about your business, they won’t be able to choose you. In a market in recession, you should be able to stand apart from the competition and be the business that continues to advertise and offer outstanding customer satisfaction.
It’s important to use both free marketing opportunities such as social media and to advertise. A well-thought-out Twitter presence, a Facebook page with interesting activity, and a visually stimulating Instagram profile are all excellent ways to get your name out there without overspending.
Pay close attention to your personal and business credit
When business sags in a recession, you may need more capital to keep your operations going. It could be a good idea to apply for bank loans to survive lean periods. If both you and your business have great credit scores, you’ll be able to easily apply for small business loans. It’s important to watch your credit scores closely to make sure that they are always stellar.
Many experts see an economic downturn on the horizon, even if it’s anything but certain when it will happen. Prudently marketing your business, managing cash flow, maintaining your credit score and offering outstanding customer service are the best ways to weather any recession that may show up.
Bianca Frank Design provides Web Design in Anchorage, Logo Design, Brand Strategy and Content
We are a brand design agency providing holistic brand, marketing and design for small to medium sized businesses. We love what we do. Give us an opportunity to show you what we can do for your business!